Pushed by piracy to embrace on-demand

All industries are resistant to change, so it’s not surprising that Hollywood only grudgingly warmed up to video-on-demand.

“In the old days, and by that I mean 10 years ago, before the Internet changed everything, the model was all about control,” says Arash Amel, research director for IHS Screen Digest. In that traditional approach, distributors stoked consumer demand for movies with heavy marketing, but then limited their availability in windows from theaters to TV.

“But the Internet flipped the old model on its head,” Amel says, by making piracy so easy. “It’s a paradigm shift where studios are having to meet consumer expectations, but at the same time are doing so with a degree of reluctance. Yet it’s becoming core to their strategies. So there are a lot of contradictions at play.”

Amel says that a big factor in Hollywood overcoming its resistance to VOD is that some of its largest traditional media customers, like Walmart and Apple, have licensed digital rights for services such as iTunes and Vudu.

Nevertheless, chaos continues to reign.

For instance, last week, Universal gave in to pressure from exhibs when it announced it was scrapping plans to make “Tower Heist” available via premium video-on-demand just three weeks after its theatrical release.